Changing the world through shareholder activism?

Abstract

As one of the more progressive facets of the socially responsible investment (SRI) movement, shareholder activism is generally recommended or justified on the grounds that it can create social change. But how effective are different kinds of activist campaigns likely to be in this regard? This article outlines the full range of different ways in which shareholder activism could make a difference by carefully going through, first, all the more specific lines of action typically included under the shareholder activism umbrella and, second, all of the different ways in which it has been suggested that these could influence the activities of commercial companies. It is argued that - although much more empirical research is needed in the area - there are at least theoretical reasons for thinking that it will be difficult to influence companies through the standard actions of filing or voting on shareholder resolutions. However, some alternative strategies open to activists may allow them to increase their efficacy. It is specifically argued that even individual investors could be able to push for corporate change through devising a radically self-sacrificial campaign that manages to get the attention of powerful forces outside the corporate sphere.